Finance Committee Meeting January 16, :00 pm - Regular Meeting

Transcription

1 Finance Committee Meeting January 16, :00 pm - Regular Meeting CDA Office, 7645 Currell Blvd., Woodbury 1

2 BOARD OF COMMISSIONERS WASHINGTON COUNTY COMMUNITY DEVELOPMENT AGENCY WASHINGTON COUNTY, MINNESOTA CDA FINANCE COMMITTEE AGENDA January 16, BWashington County CDA Office 6B7645 Currell Blvd. 7BWoodbury, Minnesota Item No. Page No. 1 3:00 p.m. CALL MEETING TO ORDER 2 ROLL CALL 3 DISCUSSION D-1 Redpath and Company Discussion on 3 the Audit Process D-2 Special Tax Collection and Deposit Agreement 12 Discussion ADJOURN Other CDA Board Commissioners May Be In Attendance. 2

3 DISCUSSION ITEM D-1 Redpath and Company Discussion on the Audit Process 3

4 Memo to: CDA Finance Committee From: Christianson Finance Director Date: January 8, 2018 RE: 2017 Audit Update Background At the Board meeting on November 17, 2015, the Board approved hiring Redpath and Company, (the Auditors), for professional audit services for the years As part of the service, the Auditors agreed to meet with the full Board, or Finance Committee, as appropriate, to discuss the progress of the audit. These meetings were to occur after key parts of the audit were complete. Audit Planning On December 4, 2017 Staff received the Interim Client to Provide schedule. See Attachment A. This schedule includes the documents that the Auditor requests to be provided at the time of, or prior to, their arrival for interim fieldwork. In reviewing Attachment A, one can see a column labeled Audit Area. This column gives the Committee an indication on what kind of tests the Auditors are performing, i.e. tests over controls, Single Audit testing, general control testing and Minnesota legal compliance testing. On December 5, 2017 the Finance Director had an audit planning meeting with the Partner and Senior Manager from Redpath and Company. This meeting was to discuss any new issues encountered during It was also decided at this meeting that interim fieldwork was scheduled to be performed December 13 th and 14 th. Interim Fieldwork December 13 th and 14 th Interim audit fieldwork is complete and Dave Mol, Partner, Redpath and Company, will be presenting the progress made on the 2017 audit at the January 16, 2018 Finance Committee meeting. Final Fieldwork April 4 th April 15 th Final fieldwork has been scheduled to occur April 2 nd through April 13 th. See Attachment B for the final Client to Provide schedule, provided by the Auditor on December 5, Redpath and Company will present final audit results to the Board at the May board meeting. 4

5 Recommendation Staff recommends that the Committee use this presentation as a time to ask Mr. Mol any questions it may have about the 2017 audit, including procedures performed at interim fieldwork, any current issues or unusual risks members may be concerned about as it applies to the Agency and the outcome of control testing performed at interim. It is also a time for the Committee to share any thoughts it may have in regards to the Agency in general or specifically towards the audit. 5

6 Attachment A Redpath and Company, Ltd Entity: WCCDA Client to Prepare Year: 12/31/2017 Item Audit Area Description of Request INTERIM - SCHEDULED DECEMBER 13th-14th 1 Control Testing Provide a copy of 2017 check register by check number and by vendor. We will use listing to select sample for disbursement control testing. 2 Control Testing Provide copy of G/L detail for FY 2017 to date. 3 Control Testing TB as of date of interim - used for preliminary import and account grouping 4 Control Testing Provide payroll register for first pay period in November Control Testing Access to payroll registers, time cards and HR records supporting wage rates and benefit elections for selected employees. (selection will be made based upon payroll register requested above.) Responsible Party Date requested to Redpath Notes December 8, /7/2017 December 8, /7/2017 December 8, /7/2017 December 8, /7/2017 1st day of interim 12/13/ Control Testing Provide listing of all new employees hired during December 8, /7/ Control Testing Access to credit card records, expense reimbursement detail, wire transfer information and bank statements as requested. 1st day of interim 12/13/ General List of Board Members at 12/31/17, including term of office 1st day of interim 12/7/ General Provide a copy of 2016 certificate comments 1st day of interim 12/7/ General Description of internal control procedures, review and update prior year documentation. 1st day of interim 12/13/ General Copies of any new financial related policies revisions and new policies 1st day of interim None 12 General For selected contracts: Provide actual bids or bid tabulations, publication notices and contractor performance and payment bonds. (if applicable) Becky 1st day of interim 12/13/ General Provide list of all contracts over $100,000. Becky December 8, /7/ General Provide copy of resolution index 1st day of interim 12/7/ General Chart of accounts 1st day of interim 12/7/ General Updated Budget Areas and Responsiblities document 1st day of interim 12/7/ General Copy of employee handbook - if changed during st day of interim None 18 General Copy of communication from federal agencies regarding noncompliance. Copies of reports from site visits, audits, etc. 1st day of interim None 19 Budget Copy of approved budget and related resolution for FY st day of interim HAVE 20 Budget Detail of approved budget adjustments for FY Provide resolutions for amendments made. 1st day of interim 12/20/ Budget Copy of approved budget and related resolution for FY st day of interim 12/20/ LC Complete Legal Compliance Summary Inquiry List and Public Indebtedness Checklist. 1st day of interim 12/13/ LC For bonds issued in 2017, provide access to bond book/cd 1st day of interim None Ehlers - 12/7/17 24 LC Provide copies of all "Broker Acknowledgement Forms" signed for FY st day of interim PFM - Schedule of unclaimed property and copy of reports submitted State Commissioner of 25 LC Sandi 1st day of interim 12/7/2017 Commerce (345.41) IF ANY 26 LC Provide signed Legal Compliance Representation letters from all board members. (template available) 1st day of interim 12/20/ LC Provide copy of the outstanding indebtedness form certified to the County from February Becky 1st day of interim HAVE 27 LC Provide copy of Annual Disclosure of TIF if updated since December 31, st day of interim None 28 LC Provide 2016 Annual Report Form document for TIF districts. (submitted 2017) 1st day of interim 12/7/ Insurance Provide list of any settlement exceeding insurance coverage in 2017, 2016 and Insurance Provide list of any significant reduction of insurance coverage from prior year. INTERIM - SCHEDULED DECEMBER 13th-14th Washington County CDA 12/31/17 Interim Request List Briar Pond, LLC 12/31/17 Client to Provide List Responsible Party 1st day of interim 1st day of interim Date requested to Redpath Item Description of Request 1 General Cash receipts ledger for the period 1/1/2017 through 12/7/2017 December 8, /7/ Compliance Provide 'Deposit Ledger' showing rental receipts for the months of February, April, July, and September. December 8, /7/ Compliance Provide listing of tenants that moved in and tenants that moved out during the period under audit. Becky December 8, /8/ General Check register listing for the year 1/1/2017 through 12/7/2017. (Briar Pond disbursements only) December 8, /7/ General Trial balance as of date of interim December 8, /7/ General General Ledger Detail for the fiscal year 1/1/2017 through 12/7/2017. December 8, /7/2017 None None Notes 6

7 Attachment A Washington County CDA - SINGLE AUDIT 12/31/17 Client to Provide List Responsible INTERIM - SCHEDULED DECEMBER 13th-14th Party Item Description of Request Date requested to Redpath Notes 1 General Provide DRAFT Schedule of Expenditures of Federal Awards. (Type A programs are those who's expenditures exceed $750,000, Type B Programs are those who's expenditures exceed $187,500. WCCDA is considered a low-risk auditee so minimum coverage requirement is 20%.) Once provided, major programs will be selected and additional requests for interim will be made. 7

8 Item Audit Area Description of Request Prior to fieldwork Attachment B Washington County CDA Responsible Party Date requested to Redpath 1 Planning Prepare signed confirmations (cash, investment, attorney, receivables, debt, County, etc.) as soon as available Date Received 2 Planning Copies of bond books or mortgage, promissory note, security agreement, etc for new debt issued during 2017 or 2018 through date of fieldwork. as soon as available 3 Planning Updated Internal control narrative information, if any changes are needed from the information provided at interim as soon as available 4 Planning Electronic version of FY 2017 trial balance, with all closing and other adjustments posted 3/26/ Planning Electronic version of FY 2017 G/L detail as of date of trial balance 3/26/ Planning Electronic version of 2017 disbursement register (include checks and EFT's). 3/26/ Planning Electronic report of all manual journal entries posted during /26/ Receivables Electronic version of FY 2018 receipt ledger from January 1-3/26/2018 3/26/ Payables Electronic version of FY 2018 disbursement register from January 1-3/26/2018 3/26/2018 Fieldwork - Scheduled to begin March 27, LC Provide list of deposit accounts and documentation regarding FDIC coverage and other insurance/collateral as of 12/31/ LC Electronic copy of the Report of Outstanding Indebtedness report as of 12/31/17 filed with the County. 12 LC 13 Cash/Investments If there were any decertified TIF Districts, provide a copy of the "confirmation of decertified TIF District" submitted to Washington County For all bank/broker accounts (including trust accounts) provide a copy of the December reconciliation and bank statements. 14 Cash/Investments Provide a listing of all new trust accounts and which property/debt issue they relate to 15 Cash/Investments Provide access to January 2018 Statements for all accounts 16 Cash/Investments Schedule of year-end deposits and investments, detailing each investment as of 12/31/17 by broker and description, AND FAIR VALUE LEVEL, reconciled to footnote disclosure amounts. Please include maturity dates, bank balance, book balance, rating and fund. 17 Cash/Investments Schedule of accrued interest receivable calculation 18 Cash/Investments Schedule of investment income by fund, reconciled to sources of interest 19 Cash/Investments Provide workpaper to document unrestricted vs restricted cash and investments. Historically, auditor has performed calculation to reclassify unrestricted portion of security deposit balances and surplus amounts held in trust funds from amounts reported in restricted cash. 20 Receivables Schedule of the detail of accounts receivable of DFOG balances by fund 21 Receivables Copy of aged tenant accounts receivable report 22 Receivables Schedule of Loan Receivables including interest accrual calculations 23 Receivables Calculation of receivable balances not expected to be collected within one year 24 Receivables Analysis of any allowance necessary for doubtful accounts 25 Receivables Capital Lease Receivable amortization schedule - if changes from Other Schedule of Vacancy Rates by month, property and unit size 27 Other Schedule of 2017 rent rates by property and unit size 28 Other Provide analytics of Rental by property as compared to budget and prior year. Provide explanations for significant variances as well as supporting documentation. 29 Other Provide explanations and supporting documentation for any significant, non-routine revenue sources in the properties or governmental funds 30 Property Taxes Schedule of delinquent tax activity (reconciled to County balances) including calculation of the balance not expected to be collected within one year 31 Property Taxes Schedule of Ad Valorem and TIF property tax revenue by fund 32 Property Taxes Schedules of Ad Valorem and TIF property tax collections by settlement 33 Property Taxes Copy of the Resolution adopting the 2017 and 2018 Tax Levy 34 Property Taxes Copies of all Washington County Tax Settlement statements, including Certification of TIF net tax capacities for 2017 for TIF district 75 and Prepaids Schedule of prepaid balances and detail by fund with supporting documentation for significant items. 36 Interfund Activity Matrix of interfund transfers including description and approval/authorization. 37 Interfund Activity Due to and Due from other funds balances detail per fund 38 Interfund Activity Provide schedules for Red Rock loan and Whispering Oaks TIF Loan from Interfund Activity Provide a copy of any new Interfund Loan documents and a schedule of draws on the loan 40 Interfund Activity Provide summary of balances not expected to be collected within one year 41 Capital Assets Capital Asset Lead Schedule including beginning balances, additions, deletions and ending balances and changes in accumulated depreciation. 42 Capital Assets Detail Capital Asset Schedules for buildings and structures, grounds and land improvements, furniture and fixtures and land. Including beginning balances, additions, deletions and ending balances in summary and detail by fund 43 Capital Assets Detail listing of all asset additions, reconciled to capital outlay as applicable 44 Capital Assets Detail listing of all asset disposals, including a schedule of gain/loss on disposal 45 Capital Assets Schedule of depreciation by function - previous years all deprecation was charged to general government. NCN to provide schedule if all expense should be charged to this function again in Capital Assets Provide workpaper showing calculation of deferred gain on sale of property. 47 Construction Schedule of construction activity by fund, including identification of amounts capitalized and expensed. 48 Construction 49 Construction Schedule of Contracts Payable and Retainage payable by project/fund, including identification of contract commitments Listing of all open projects at 12/31/2017, with identification of the related fund and contract details (including disclosure for committed contracts) Schedule of property held for resale, including details of any additions, deletions or changes in balance 50 Property held for resale (consider if the property is currently reported at the lower of cost or Net Realizable Value). 51 Property held for resale Have supporting documentation available for all purchases and sales of property held for Resale. 52 Payables Schedule of detail of accounts payable and DTOG at year end, by fund, including identification of and supporting documentation for any unusual and significant payables 53 Payables Schedule of PILOT accrual amounts 54 Payroll Related Schedule of salaries payable at 12/31/17, reconciled to related payroll checks of Payroll Related Provide copy of payroll registers to support salaries payable calculation. 8

9 56 Payroll Related Summary of 2017 contributions to the 457 plan including identification of the employee and employer shares, reconciled to G/L. 57 Payroll Related Provide summary plan description if changes were made to employee retirement plans during FY Payroll Related - Comp. Abs. Payroll Related - Comp. Abs. Schedule of Compensated Absences by employee as of 12/31/17, including FICA/Medicare accruals. Include details regarding beginning balance, additions, deletions and ending balance for footnote disclosure. Calculation of Compensated Absences estimated to be due in one year. Provide documentation to support any changes in OPEB position. (PY documented that WCCDA position 60 Payroll Related - OPEB is implicit rate statutes application is limited to former employees who are receiving a disability benefit. Liability recorded is $0 as there are currently no employees/former employees who meet requirements) 61 Deposits payable 62 Debt 63 Debt 64 Debt 65 Debt 66 Debt Schedules for escrow, security, FSS and other deposits payable, including reconciliation of the deposit amount to the related deposit bank account balance For Governmental Activities Long term Debt, provide a schedule of beginning balances, additions, deletions, ending balances and the related interest payable calculations Provide loan/mortgage/bond documents including amortization schedules for any new debt in governmental activities For Proprietary Notes and Mortgages payable, provide a schedule of beginning balances, additions, deletions, ending balances and identification of the amount due within one year For Bonds, provide a schedule of beginning balances, additions, deletions, ending balances and identification of the amount due within one year For new refunding's of debt, prepare calculations to analyze the refunding and determine if there is any gain/loss on refunding. 67 Debt For any other new or updated agreements, provide updated payment and amortization schedules as needed (including the new developer's agreement) 68 Debt Provide a schedule of accrued interest payable at 12/31/ Debt Provide amortization schedules for gains/loss, premiums, and discounts, etc. 70 Debt Schedule of conduit debt outstanding 71 Debt Schedule of deferred refunding costs 72 Debt Schedule of compliance with debt covenants 73 Debt Provide workpaper to summarize information for Debt footnotes. (including revenues pledged) 74 Leases For any significant leases (annual payments greater than $20,000) provide copies of lease documents (if new or changes from prior year) 75 Deferred Schedule of unavailable/unearned revenue by fund and nature of revenue INCLUDING summarized information to tie to footnote #5. 76 Equity Schedule of the components of net position 77 Equity Schedule of the components of fund-based equity allocations, including support/authorization for amounts restricted, committed, etc. 78 Equity Updated fund balance or net position policies including board resolution adopting policy. 79 Equity Provide updated language for Note 14B - Minimum Unassigned Fund Balance. (Including calculation to determine targeted unassigned fund balance amount per the policy) 80 lead schedule listing out individual grant amounts, with fund identification and reconciling current year receipts with current year and prior year receivables/deferrals to end at current year revenue. NOTE: Ensure workpaper gets updated for all IGR amounts Provide 2017 disbursement schedule for Housing Choice Voucher Program. Provide G/L detail summary of HOME grant expenditures and access to request for reimbursement for largest reimbursement request from Dakota County CDA. Provide detailed IDIS reconciliation to G/L for CDBG Grant Expenditures. Provide ELOCCS draw report for all 2017 draws for Whispering Pines operating subsidy. Provide ELOCCS draw report for all 2017 draws for Shelter Plus Care. Provide additional supporting documentation from grant files as requested during audit. Provide final Schedule of Expenditures of Federal Awards with reconciliation to federal revenues as identified on IGR lead. Provide copy of Shelter agreement in place during FY (If changes were made to the previously 88 Other existing agreement) During and after Fieldwork 89 General During the course of testing, we generally will identify additional items which require explanation, reconciliation and/or supporting documentation. We will make these requests as the items come to our attention. 90 CAFR Transmittal Letter prior to audit issuance 91 CAFR MD&A prior to audit issuance 92 CAFR CAFR cover prior to audit issuance 93 CAFR Organizational Chart prior to audit issuance 94 CAFR Provide copy of Certificate of Achievement from prior to audit issuance 12/12/ CAFR Provide updated language for Note 1B - Reporting Entity. prior to audit issuance 96 CAFR Provide copies of financial statements and governance letters for discretely presented component units. Footnotes preferred in MS Word for easy inclusion in CAFR. prior to audit issuance 97 CAFR Statistical section (tables 7,9-15) prior to audit issuance on-going Any questions on audit prep can be directed to Cathy Lydon - clydon@redpathcpas.com or Dave Mol - dmol@redpathcpas.com

10 Item Audit Area Description of Request Prior to fieldwork Attachment B Washington County CDA Responsible Party Date requested to Redpath 1 Planning Prepare signed confirmations (cash, investment, attorney, receivables, debt, County, etc.) as soon as available Date Received 2 Planning Copies of bond books or mortgage, promissory note, security agreement, etc for new debt issued during 2017 or 2018 through date of fieldwork. as soon as available 3 Planning Updated Internal control narrative information, if any changes are needed from the information provided at interim as soon as available 4 Planning Electronic version of FY 2017 trial balance, with all closing and other adjustments posted 3/26/ Planning Electronic version of FY 2017 G/L detail as of date of trial balance 3/26/ Planning Electronic version of 2017 disbursement register (include checks and EFT's). 3/26/ Planning Electronic report of all manual journal entries posted during /26/ Receivables Electronic version of FY 2018 receipt ledger from January 1-3/26/2018 3/26/ Payables Electronic version of FY 2018 disbursement register from January 1-3/26/2018 3/26/2018 Fieldwork - Scheduled to begin March 27, LC Provide list of deposit accounts and documentation regarding FDIC coverage and other insurance/collateral as of 12/31/ LC Electronic copy of the Report of Outstanding Indebtedness report as of 12/31/17 filed with the County. 12 LC 13 Cash/Investments If there were any decertified TIF Districts, provide a copy of the "confirmation of decertified TIF District" submitted to Washington County For all bank/broker accounts (including trust accounts) provide a copy of the December reconciliation and bank statements. 14 Cash/Investments Provide a listing of all new trust accounts and which property/debt issue they relate to 15 Cash/Investments Provide access to January 2018 Statements for all accounts 16 Cash/Investments Schedule of year-end deposits and investments, detailing each investment as of 12/31/17 by broker and description, AND FAIR VALUE LEVEL, reconciled to footnote disclosure amounts. Please include maturity dates, bank balance, book balance, rating and fund. 17 Cash/Investments Schedule of accrued interest receivable calculation 18 Cash/Investments Schedule of investment income by fund, reconciled to sources of interest 19 Cash/Investments Provide workpaper to document unrestricted vs restricted cash and investments. Historically, auditor has performed calculation to reclassify unrestricted portion of security deposit balances and surplus amounts held in trust funds from amounts reported in restricted cash. 20 Receivables Schedule of the detail of accounts receivable of DFOG balances by fund 21 Receivables Copy of aged tenant accounts receivable report 22 Receivables Schedule of Loan Receivables including interest accrual calculations 23 Receivables Calculation of receivable balances not expected to be collected within one year 24 Receivables Analysis of any allowance necessary for doubtful accounts 25 Receivables Capital Lease Receivable amortization schedule - if changes from Other Schedule of Vacancy Rates by month, property and unit size 27 Other Schedule of 2017 rent rates by property and unit size 28 Other Provide analytics of Rental by property as compared to budget and prior year. Provide explanations for significant variances as well as supporting documentation. 29 Other Provide explanations and supporting documentation for any significant, non-routine revenue sources in the properties or governmental funds 30 Property Taxes Schedule of delinquent tax activity (reconciled to County balances) including calculation of the balance not expected to be collected within one year 31 Property Taxes Schedule of Ad Valorem and TIF property tax revenue by fund 32 Property Taxes Schedules of Ad Valorem and TIF property tax collections by settlement 33 Property Taxes Copy of the Resolution adopting the 2017 and 2018 Tax Levy 34 Property Taxes Copies of all Washington County Tax Settlement statements, including Certification of TIF net tax capacities for 2017 for TIF district 75 and Prepaids Schedule of prepaid balances and detail by fund with supporting documentation for significant items. 36 Interfund Activity Matrix of interfund transfers including description and approval/authorization. 37 Interfund Activity Due to and Due from other funds balances detail per fund 38 Interfund Activity Provide schedules for Red Rock loan and Whispering Oaks TIF Loan from Interfund Activity Provide a copy of any new Interfund Loan documents and a schedule of draws on the loan 40 Interfund Activity Provide summary of balances not expected to be collected within one year 41 Capital Assets Capital Asset Lead Schedule including beginning balances, additions, deletions and ending balances and changes in accumulated depreciation. 42 Capital Assets Detail Capital Asset Schedules for buildings and structures, grounds and land improvements, furniture and fixtures and land. Including beginning balances, additions, deletions and ending balances in summary and detail by fund 43 Capital Assets Detail listing of all asset additions, reconciled to capital outlay as applicable 44 Capital Assets Detail listing of all asset disposals, including a schedule of gain/loss on disposal 45 Capital Assets Schedule of depreciation by function - previous years all deprecation was charged to general government. NCN to provide schedule if all expense should be charged to this function again in Capital Assets Provide workpaper showing calculation of deferred gain on sale of property. 47 Construction Schedule of construction activity by fund, including identification of amounts capitalized and expensed. 48 Construction 49 Construction Schedule of Contracts Payable and Retainage payable by project/fund, including identification of contract commitments Listing of all open projects at 12/31/2017, with identification of the related fund and contract details (including disclosure for committed contracts) Schedule of property held for resale, including details of any additions, deletions or changes in balance 50 Property held for resale (consider if the property is currently reported at the lower of cost or Net Realizable Value). 51 Property held for resale Have supporting documentation available for all purchases and sales of property held for Resale. 52 Payables Schedule of detail of accounts payable and DTOG at year end, by fund, including identification of and supporting documentation for any unusual and significant payables 53 Payables Schedule of PILOT accrual amounts 54 Payroll Related Schedule of salaries payable at 12/31/17, reconciled to related payroll checks of Payroll Related Provide copy of payroll registers to support salaries payable calculation. 10

11 56 Payroll Related Summary of 2017 contributions to the 457 plan including identification of the employee and employer shares, reconciled to G/L. 57 Payroll Related Provide summary plan description if changes were made to employee retirement plans during FY Payroll Related - Comp. Abs. Payroll Related - Comp. Abs. Schedule of Compensated Absences by employee as of 12/31/17, including FICA/Medicare accruals. Include details regarding beginning balance, additions, deletions and ending balance for footnote disclosure. Calculation of Compensated Absences estimated to be due in one year. Provide documentation to support any changes in OPEB position. (PY documented that WCCDA position 60 Payroll Related - OPEB is implicit rate statutes application is limited to former employees who are receiving a disability benefit. Liability recorded is $0 as there are currently no employees/former employees who meet requirements) 61 Deposits payable 62 Debt 63 Debt 64 Debt 65 Debt 66 Debt Schedules for escrow, security, FSS and other deposits payable, including reconciliation of the deposit amount to the related deposit bank account balance For Governmental Activities Long term Debt, provide a schedule of beginning balances, additions, deletions, ending balances and the related interest payable calculations Provide loan/mortgage/bond documents including amortization schedules for any new debt in governmental activities For Proprietary Notes and Mortgages payable, provide a schedule of beginning balances, additions, deletions, ending balances and identification of the amount due within one year For Bonds, provide a schedule of beginning balances, additions, deletions, ending balances and identification of the amount due within one year For new refunding's of debt, prepare calculations to analyze the refunding and determine if there is any gain/loss on refunding. 67 Debt For any other new or updated agreements, provide updated payment and amortization schedules as needed (including the new developer's agreement) 68 Debt Provide a schedule of accrued interest payable at 12/31/ Debt Provide amortization schedules for gains/loss, premiums, and discounts, etc. 70 Debt Schedule of conduit debt outstanding 71 Debt Schedule of deferred refunding costs 72 Debt Schedule of compliance with debt covenants 73 Debt Provide workpaper to summarize information for Debt footnotes. (including revenues pledged) 74 Leases For any significant leases (annual payments greater than $20,000) provide copies of lease documents (if new or changes from prior year) 75 Deferred Schedule of unavailable/unearned revenue by fund and nature of revenue INCLUDING summarized information to tie to footnote #5. 76 Equity Schedule of the components of net position 77 Equity Schedule of the components of fund-based equity allocations, including support/authorization for amounts restricted, committed, etc. 78 Equity Updated fund balance or net position policies including board resolution adopting policy. 79 Equity Provide updated language for Note 14B - Minimum Unassigned Fund Balance. (Including calculation to determine targeted unassigned fund balance amount per the policy) 80 lead schedule listing out individual grant amounts, with fund identification and reconciling current year receipts with current year and prior year receivables/deferrals to end at current year revenue. NOTE: Ensure workpaper gets updated for all IGR amounts Provide 2017 disbursement schedule for Housing Choice Voucher Program. Provide G/L detail summary of HOME grant expenditures and access to request for reimbursement for largest reimbursement request from Dakota County CDA. Provide detailed IDIS reconciliation to G/L for CDBG Grant Expenditures. Provide ELOCCS draw report for all 2017 draws for Whispering Pines operating subsidy. Provide ELOCCS draw report for all 2017 draws for Shelter Plus Care. Provide additional supporting documentation from grant files as requested during audit. Provide final Schedule of Expenditures of Federal Awards with reconciliation to federal revenues as identified on IGR lead. Provide copy of Shelter agreement in place during FY (If changes were made to the previously 88 Other existing agreement) During and after Fieldwork 89 General During the course of testing, we generally will identify additional items which require explanation, reconciliation and/or supporting documentation. We will make these requests as the items come to our attention. 90 CAFR Transmittal Letter prior to audit issuance 91 CAFR MD&A prior to audit issuance 92 CAFR CAFR cover prior to audit issuance 93 CAFR Organizational Chart prior to audit issuance 94 CAFR Provide copy of Certificate of Achievement from prior to audit issuance 12/12/ CAFR Provide updated language for Note 1B - Reporting Entity. prior to audit issuance 96 CAFR Provide copies of financial statements and governance letters for discretely presented component units. Footnotes preferred in MS Word for easy inclusion in CAFR. prior to audit issuance 97 CAFR Statistical section (tables 7,9-15) prior to audit issuance on-going Any questions on audit prep can be directed to Cathy Lydon - clydon@redpathcpas.com or Dave Mol - dmol@redpathcpas.com

12 DISCUSSION ITEM D-2 Special Tax Collection and Deposit Agreement Discussion 12

13 Memo to: CDA Finance Committee From: Christianson Finance Director Date: January 8, 2018 RE: Special Tax Collection and Deposit Agreement Background Before 2010, many of the bonds issued by the CDA had its levy money pledged to make principal and interest payments (the levy is referred to statute as a Special Benefit Levy ). The Special Tax Collection and Deposit Agreement was created in 1996 and amended in The agreement was needed in order to establish a procedure to cause the proper disposition of the Special Benefit taxes in accordance with the requirements of the Indenture. This document insured that the County Auditor-Treasurer had clear instruction on where to send the levy and that the Trustee had clear instructions on what to do with the levy. Post 2010, the CDA began requesting the County to pledge its full faith and credit (a general obligation pledge) as a credit enhancement tool for CDA bonds. In this approach, a lower interest rate was obtainable, which had the effect of reducing interest payments and therefore reducing debt service costs. A Custodial Agreement with the county was created as part of the bond transaction to mitigate risk to the county in the unlikely event that the county would have to pay the debt service on the bonds. The custodial agreements required that CDA rental income pay for principal and interest, and levy was to be used for debt service reserve coverage or operating expenses. Propose to Amend the Special Tax Collection and Deposit Agreement The Special Tax Collection and Deposit Agreement needs to be amended. First, the bond issues referenced in the agreement are out dated. Second, the agreement is silent in regards to the custodial agreement. Finally, the agreement requires that the CDA levy be held in trust (by the bond trustee) until August 15 th for the July deposit and February 15 th for the December deposit. This agreement is now redundant due to the custodial agreement and the terms can potentially harm the CDA s cash flow making it difficult to operate. The custodial agreement requires 100% of property income to accrue in trust for the payment of the bonds. Further, the custodial agreement requires that a debt service reserve, with a minimum balance equal to the annual debt service of the highest remaining year, be established. This means that at the time the levy is received, the principal and interest 13

14 payment is fully accrued, and in addition, there is a reserve equal to at least the upcoming year s principal and interest requirement. Next Steps These issues have been discussed with county staff. County staff has recommended bringing the proposed changes to the County Finance Committee and then possibly present a resolution to the full county board. A revised agreement has been drafted and final action by the CDA Board will be scheduled once county authorization is provided. 14